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MARKETS REDUX: THE POLITICS OF FARMERS’ MARKETS IN CUBA

Juan Carlos Espinosa

The purpose of this paper is to discuss the decision tore-open Farmers’ Markets in Cuba in 1994 and to as-sess their significance in the context of the policychanges and reforms that began in the summer of1993. To this end, the Mercados agropecuarios (MAs)will also be compared to the Mercados libres campesi-nos (MLCs) of the 1980s, the only other instancethat the Cuban State resorted to market mechanismsto try to resolve the problems of agricultural produc-tion and food distribution. The process of interestgroup and institutional politics that led to the open-ing, and later closing of the MLCs is particularly in-structive for an understanding of economic policychanges in Cuba. Comparing the two market ‘experi-ments’ might also indicate important changes in theprocess that one scholar has called “the blackest of allblack boxes”: decision making in Cuba (Fernández1992, p. 53).

The MAs and the MLCs emerged in very differenteconomic, social and political situations. The dispar-ate circumstances also affect the attitudes of the polit-ical leadership towards the markets. A discussion ofthe politics of the Farmers’ Markets must be placedin the context of the evolution of Cuba’s economicpolicies, the Revolution’s ideological orientation, aswell as the nature of politics and decision making inCuba. They are the product not only of Cuba’s eco-nomic predicament and its international position,but of domestic political factors that have helped cre-

ate a different set of supporters and detractors for themarket experiments.

This preliminary study is limited by the availabilityof information on the decision making process inCuba, the uncertain fate of the current market re-forms, as well as by the brief time the MAs have beenin operation, less than a year at the time of writing.Despite these limitations, even a speculative exercisemay prove valuable as a starting point for an analysisof conflict resolution and decision making in theCastro regime. Two underlying assumptions must berevealed at the very beginning. The author believesthat interest-group conflicts over policy do occur inCuba, albeit within the severe constraints imposed bypersonalismo, ideology, and economic circumstances.The second assumption is that even in opaque areassuch as decision making in Cuba, some light can beshed on the meaning of policy moves (or conse-quences) by identifying actors, interests, and interac-tions, and by studying the trajectory between initialconditions and outcomes.

ECONOMIC POLICY AND DECISION MAKING IN CUBAOne of the constants of the Cuban Revolution hasbeen the tension between ideological and pragmaticapproaches to economic policy (Mesa-Lago 1989,pp. 187-188). Pedro Pablo Cuscó, a Cuban econo-mist, recently referred to the process of internal de-bate as a ‘contrapunteo’ between these two approach-es.1 There is a general consensus over the

1. Pedro Pablo Cuscó, interview, Miami, July 29, 1995. Contrapunteo literally means ‘counterpoint.’

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periodization of the policies that recognizes at leastseven discrete stages (see Appendix). We can charac-terize the general approach to economic policy takenduring these periods as either Fidelista, reformist/pragmatic or mixed/unclear.2

Two brief, but important periods of communist Cu-ba’s economic history are typified by Fidelismo:1966-1970 and 1986-1990.3 Political considerationsoverrode economic rationality during those years.These periods were characterized by tendencies to-ward centralization of power and decision making,greater utilization of sectoral plans over more globalplanning, emphasis on voluntarism and mass mobili-zation, moral incentives and egalitarianism, as well asanti-market and anti-private initiative campaigns.Significantly, these periods have been followed by se-vere economic downturns. The periods denoted Fi-delista have also been called as orthodox or ideologi-cal by other authors (Mesa Lago 1989, Rosenberg1992a, inter alia).4

The years 1971-1986, were characterized to varyingdegrees by reformist tendencies. The period was typi-fied by moves toward decentralization, the use of So-viet-style central planning with some market features,the use of material incentives, and increased socialand wage differentiation.5 The period can be dividedinto three discrete phases: (1) Redefinition (1971-1974), which involved the assessment of the disas-trous dislocations engendered by the pharaonic at-tempt at a 10 million metric ton sugar harvest andthe redirection of economic policy under the aegis ofSoviet-bloc economists and technicians. The pre-dominant approach in economic policy could still becategorized as mixed or unclear; (2) Institutionaliza-tion (1975-1984), which saw an attempt to create

2. The term “fidelista” as used here is not inconsistent with Eduardo González’s definition and later use of the term, i.e. (1) propensi-ty for maximalism, (2) primacy of objective over subjective factors, (3) penchant for revolutionary action and elitism, (4) disdain for po-litical organization, (5) preference for personalistic leadership, etc. See González (1974, p. 83 and pp. 146-167).

3. The first period is called “Sino-Guevarist” because of the dominant influence of Che Guevara and of Chinese-style mass mobiliza-tion. The latter period is known as the Rectification Period or RP.

4. The term “orthodox” has been the source of some confusion. As used in Cuba, it refers to Soviet-style policies such as those of1971-1986. Other scholars working outside Cuba have used the word to describe ideologically charged periods when Cuba has actuallyhad policies contrary to those of the Soviet Union. The term is avoided or qualified in this paper.

5. These policies have been associated with “reform-communism” models (see Kornai 1992, inter alia).

Soviet-style institutions and implement the reformsthat typify this period. It can be argued that thisnine-year phase is the only time that Cuba actuallytried to follow an economic model although it neverfully implemented the reforms and economic deci-sion-making never devolved from the highly central-ized purview of Fidel Castro and his inner sanctum;and (3) Recentralization (1984-1986), which was theperiod of retreat from reform. The SDPE was dis-mantled and there were increasingly ideological at-tacks on merolicos as the newly-prosperous farmersand middlemen were called. The MLCs came underextreme duress only to be abolished in 1986. In fact,the Rectification Process can be said to have begun atthis time, or at the very least was presaged by theanti-market, ascetic rhetoric that emerged.

“Mixed” or “unclear” periods were those when eithera debate over models was taking place (e.g. 1964-1966) or when there seemed to be no clear directionor model indicated. Economic policy in the first fewyears of the Revolution, in the immediate post-1970zafra period and during the Special Period, can beplaced in this category. These periods have seen theclosest thing to open debate in economic policy, al-beit within the parameters described in the decision-making framework described below. They have alsobeen periods of uncertainty and flux, both in policyand in personnel. It is during these times more thanany other that the personalistic influence of FidelCastro is most acute. Policy-participants court his at-tention à la Mandarin emperor and a single utterancefrom Castro can send policy spinning in different di-rections.

Pragmatic reformists, those who have encouraged theuse of market-like mechanisms, have been most in-

Markets Redux: The Politics of Farmers’ Markets in Cuba

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fluential during phases of the Soviet Reform Model(1971-1986) and of the Special Period (mid-1993 tothe present). Although they have never had completecontrol over policy making, on both occasions theyhave been able to control important sectors or aspectsof Cuba’s economy. Their hold has been tenuous; infact during the Institutionalization Phase of the Sovi-et Reform Model, the trend was mixed. It was in-creasingly characterized by compromises that dimin-ished the role of markets (especially after therestrictions placed on the MLCs in 1982), and thestatus of the reformers within policy circles.

Despite Fidel Castro’s well-documented aversion tothem, markets and market-like mechanisms have ap-peared twice after the consolidation of the Revolu-tion, in the late 1970s - early 1980s and again afterthe summer of 1993. These ‘moves to the market’were taken with the approval of the leadership butwere initiated by more pragmatic functionaries work-ing within the state’s economic policy circles. For thepurposes of discussion, we will extrapolate politicaltendency from policy approach. In that case, the ten-sion between approaches also exists between identifi-able groups of people.

As noted above, markets appeared only during peri-ods when reformists were most influential. That isnot to say that the Fidelista tendency lost or that re-formists were in control of economic policy making.That has consistently remained in the hands of thetop leadership. Instead, on both occasions, the mar-ket features that emerged were the result of a processof compromise which allowed Fidel and the ortho-dox group ultimate control even as the reformist ex-periments were carried out.

DECISION MAKING IN CUBAUnderlying almost every dispute or controversy inCuban studies is the question of the nature of theCastro regime and its modus operandi.6 It is really aquestion about politics and how decisions are madethat is colored by the almost inevitable bias of thescholar. There is also an unfortunate tendency to try

6. See for example the exchange between Susan Eckstein and Carmelo Mesa-Lago on the Rectification Process in several issues of thejournal Cuban Studies.

to explain political phenomena by any other disci-plinary means except politics. These kinds of ap-proaches, from the psychological-biographical to theeconomic structuralist, are informative and occasion-ally interesting, but fail to give an adequate explana-tion of the full scope of politics in Cuba. Hungarianeconomist János Kornai recommends a political-eco-nomic approach that is more holistic. He writes that“the key to an understanding of the socialist system isto examine the structure of power” (1992, p. 33). Thisholds true for Cuba’s socialist economy as well. Anelaborate analysis of the regime is beyond the scopeof this brief paper, but a short discussion of the deci-sion making process is crucial to an understanding ofthe market experiments.

Damián J. Fernández identified four major views ofthe decision making process of the Cuban State thatapproximate the contending approaches alluded toabove: (1) Fidel Castro as the sole decision maker; (2)a rational actor approach; (3) a structuralist depen-dentista model; and (4) an amalgam of domestic in-stitutional, bureaucratic and elite politics approaches.Fernández finds all four approaches inadequate ifused alone and integrates them.

The framework of decision making can be conceivedas four concentric circles. The smaller inner circle, atthe center, is that of Fidel Castro, the principal deci-sion making unit. His ideology and his authority ex-ert predominant influence over Cuba’s domestic andinternational activities. The actors closest to the cen-ter circle have authority to make decisions, while pe-ripheral actors implement decisions (1992, p. 60).

This simple model recognizes the centrality of Fidel,the existence of distinct agendas among ideologicaland bureaucratic elites, the influence of the externalenvironment, and the intricacies of domestic politics.This framework can also be used to look at the pro-cess of decision making in economic policy.

Figure 1, adapted from Fernández, illustrates a modelof the structure and process of economic decisionmaking in Cuba related to food and agricultural poli-


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cy. At the center, in circle 1, is Fidel Castro. The sec-ond circle is inhabited by his closest advisors such asCarlos Lage, José Luis Rodríguez and Raúl Castro.The third circle is divided into State and the Partyhalves. These two sections are “interweaved” (Kornai1992, p. 38) and consist of the ministries such as Ag-riculture (MINAGRI), and Food Production (MI-NALIM), and party institutions such as the CentralCommittee. The outer circle consists of agriculturalproducers, the National Association of Small Farm-ers (ANAP), the State bureaucracies, provincial andmunicipal authorities in charge of implementingfood and agricultural policy, Communist Party activ-ists, and consumers. Academics who are not a part ofthe “in” advisory group of the third circle, but whonevertheless function in institutional settings, are in-cluded in the outer circle.

Ideas and policy options percolate toward the center.The role of the second circle, made up of specializedinstitutions of the state and the Communist Party, isto present policy options to the leadership, but some-times ideas start from the outer circles. The scope ofthe policy options are limited by political constraints.Their ultimate fate is determined by their ability tofind a ‘sponsor’ close to the center and of course, thedisposition of the “principal decision making unit.”

Tzvi Medin’s metaphor of “Ravelization” is a color-ful, yet insightful description of this process. Refer-ring to the dissemination of the “revolutionary mes-sage” in order to shape a new political culture, Medinwrites: “I call this phenomenon the ‘Ravelization’ ofthe message, in the sense that, as in Ravel’s Bolero, acertain motif begins to creep in and gradually devel-ops into a crescendo through numerous channels (in-struments), increasing in volume until it finally dom-inates the piece completely (1990, p. 11).”

In the case of both the MLCs and the MAs, the op-tion to open the markets began as a theme thatmoved through the policy orchestra until it was tak-en up by more powerful voices. Yet even after theMLCs became the policy, to continue Medin’s musi-

cal image, an inversion of the ‘markets’ motif was in-troduced fugue-like into food and agricultural policy.This counter-theme won out in the end.

Of course there are other less artistic explanations ofdecision-making in communist economies that relymore on structural dimensions such as Kornai’s, butthey are inadequate because they underestimate therole of agency, particularly the impact of the maxi-mum leader in the economic policy decision makingarena.

The demise of the MLCs in 1986, however, demon-strated that: (1) political imperatives, often cloakedby ideology, carried more weight than economic ra-tionality or ideological consistency; (2) markets andthe relations they engender encouraged linkageswhich fostered independence from the State andthus, were perceived as inherently threatening to theintegrity of the regime; and (3) that the ultimate fateof all policies is decided by Fidel Castro and others inthe center of the concentric circle of decision-makingand policy implementation in Cuba.

THE MERCADO LIBRE CAMPESINO 7

“Creo que el mercado libre campesino va a pasar singlorias y habiéndonos dejado una gran lección y nopocos daños, no sé cuántos millonarios hay por ahí.Rectificaremos lo que incuestionablemente fue unadecisión equivocada; es de sabio rectificar, y cuantomás pronto se rectifique mejor” (Castro 1986d, pp.57-58).

Problems in Cuba’s domestic food sector led to theintroduction of the Mercados libres campesinos in May1980. The MLCs were sites where small privatefarmers, cooperativists, state farm workers and own-ers of small plots and gardens could sell their surplusproduce directly to consumers, with prices set bysupply and demand, albeit under significant restric-tions.8

According to Medea Benjamin, the idea of allowingprivate farmers to sell their surplus was discussed asearly as the mid-1970s by the party leadership.

7. This section relies heavily on the work of Benjamin, et. al. (1984) and Rosenberg (1992a 1992b).

8. The farmers would first have to satisfy their production quota with the State (the acopio), before they could sell at the markets.


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Figueroa and García report that “the creation of anon-state market to commercialize a portion of agri-cultural production” was discussed in the First Con-gress of the Cuban Communist Party in 1976. Pro-ponents of the markets, such as Carlos RafaelRodríguez, saw them as a way to satisfy consumer de-mand for increased variety and quality, while at thesame time providing farmers with material incentivesto increase production. Additionally, they were seenas a way to subvert the black market.9 Opponents ofthe markets were concerned that private farmerswould “seek individual gain rather than the commongood” and that by making private farming more at-

9. Figueroa and García (1984, p 46) noted that the MLCs were a response to low levels of efficiency and production in the agricul-tural sector, inability to satisfy consumer demand, and to provide material incentives for farmers.

tractive, the markets would discourage farmers fromjoining the producer cooperatives the governmentwas encouraging. The political impasse meant thatthe idea was “shelved” until 1980 when “furtherpressures finally turned the tables in their favor (Ben-jamin, et. al. 1984, p. 62).”

Jonathan Rosenberg’s (1992a and 1992b) study ofthe Mercados libres campesinos argues that the rise andfall of the MLCs is best understood as the outcomeof political conflict between the two groups identi-fied by Benjamin, a struggle between advocates of“orthodox” and radical approaches to socialist devel-

Academics

Party Regulars& Activists

CC

Consumers

CDRs

Close Advisors

FIDEL

External Environment

External Stimuli

Domestic Information

Producers

ANAP

MINAGRI

STATEMINALIM

Bureaucracy /OOPs

Intended Policy

Intended Policy

Actual Policy

Actual Policy

Figure 1. Economic Decision-Making in Cuba(Food and Agricultural Sectors)


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opment.10 The formation of the MLCs was the resultof compromises between the two approaches.

The dispute was more than a difference between twosocialist development models; it was a dispute overpolicy among actors with clear political interests inthe success or failure of liberalizing reforms. For sup-porters, the MLCs provided increased importance inthe domestic political economy and credit for a poli-cy that would increase support for the Revolution.“For opponents, successful MLCs threatened theircontinued domination of the domestic politicaleconomy by focusing the credit on the agrarian pri-vate sector and on the technocratic elites” (Rosenberg1992a, p. 85).

Rosenberg claims that the original impetus for theMLCs began among Soviet and Bulgarian advisors atthe Agriculture Ministry in the 1970s. The privatemarketing of agricultural surpluses was allowed insome of the other Socialist countries with some suc-cess. In time, the main supporters of the MLCs werethe institutions most identified with Soviet-style re-forms11 such as the State Planning Ministry (JUCE-PLAN), and later, the Economic Management andPlanning System (SDPE). By 1980, the National As-sociation of Small Farmers (ANAP), the AgricultureMinistry (MINAG), the State Committee for Fi-nance and Statistics, and the Cuban Institute for theInvestigation and Orientation of Internal Demand(ICIODI) were also identified as institutional sup-porters.

Opponents of the MLCs included the provincial par-ty first secretaries, the Agriculture Cooperatives Asso-ciations (CPA), Arnaldo Milián (the Central Com-mittee member responsible for the MINAG), andFidel Castro. The cast of proponents and detractorschanged over time as the MLCs came under increas-

10. “Orthodox” approaches are identified with Soviet-style reforms, while radicals are refered to as fidelistas in this paper.

11. These reforms included the introduction of market mechanisms such as credit, interest, rational pricing, budgets, monetary con-trols, and taxes. Decentralization of economic decision making and the use of economic indicators that focused on profits as well as out-put, productivity, quality and cost (Mesa-Lago 1981, p. 29).

ing attack from consumers and from the radical anti-market leadership.

The years 1980-82 were characterized by early opti-mism, but mounting problems (see for example,Martínez 1981a, 1981b, 1982). Consumer com-plaints about high prices and accusations of illegal ac-tivities (such as the use of middlemen, profiteering,and diversion of acopio products to the MLCs) pro-vided the backdrop for a crackdown in February1982 (Operation Bird-on-a-wire or Pitirre en elalambre), increasingly hostile comments from Fidel(see Castro 1982a, 1982b) and a restrictive reform ofthe MLC law in 1983.

Rosenberg concluded that the MLCs were designedto fail. The author cited an interview with a formerofficial (José Luis Llovio-Menéndez) to claim thatthe MLCs were doomed and subverted from the startfor political reasons. In December 1980, a secret ac-cord was produced for the second Cuban Commu-nist Party (PCC) Congress that claimed support forthe CPAs and outlined a plan for the disintegrationof the MLCs. The plan was passed along to MLC op-ponents and supporters. It reportedly said that MLCswould collapse on their own and that the Party in-tended to allow that to happen. The accord’s conclu-sions did not require supporters to become active op-ponents, but it also made it politically unwise toactively support MLCs (Rosenberg 1992a, p. 72).

Opponents whittled away at the initial support en-joyed by the MLCs. High prices and lack of accessi-bility were the major complaints of consumers, par-ticularly those from the popular sectors.12 Thesecomplaints were amply documented in the Cubanpress and in other sources (see Benjamin, et. al. 1984,Martínez 1981b). Rather than accede to demands for

12. High prices were expected at the beginning, but they were supposed to decline as market forces operated. The price decrease pre-dicted by Fidel when he announced the opening of the MLCs never occurred (Alonso, J. 1992, p. 175).


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price controls, 13 the government focused its energyon demonizing and punishing “intermediaries,”greedy farmers, and others who appeared to be get-ting rich from their activities in the MLCs and in theblack market (Rosenberg 1992a, p. 384). Other sup-porters began to distance themselves from the mar-kets in the wake of Operation Bird-on-a-wire.

The additional measures taken in 1983 also nar-rowed the base of support for the MLCs among theagricultural sector. Access to the markets was limitedto private farmers who were members of ANAP andwho worked their own land, explicitly excluding co-operatives (Burnhill 1985, p. 23). CPA members andprivate farmers not only had different interests andperceptions, but had different cost/benefit relationsto the MLCs. “The CPA members adopted the anti-market attitude growing within the top echelons ofthe party, the CPA national movement and ANAP,while private farmers advocated more liberal marketregulations that would allow them to take better ad-vantage of strong consumer demand” (Rosenberg1992a, p. 386).

Humberto Pérez (JUCEPLAN minister) and thepro-MLC ANAP president José Ramírez Cruz weredismissed in 1985. In May 1986, Castro announcedthe closing of the MLCs using strong language andthe kind of moral, anti-market rhetoric that wouldcharacterize the Rectification Period: “The liquida-tion of the MLCs is the beginning of the end of theweeds that are the remnants of capitalism, it is a greatblow in the crusade that our society has embarkedupon against all manifestations of privilege, devia-tion, blandenguería, or weakness that can blunt revo-lutionary principles (Pozo & Martínez 1986, p. 4).”Free small farmers, the last supporters of the markets,were politically isolated and found themselves with-out a powerful representative among the political

13. “By drastically limiting the pool of potential sellers and refusing to regulate prices, Fidel had practically guaranteed that MLC pric-es would remain high. And the rise in taxes, from an easily circumvented 3% to a carefully enforced 20%, restored some of the incen-tives for black market activities (Rosenberg 1992a, p. 451).”

elites or an institutional base from which to defendtheir interests.

At the Fourth Party Congress (1991) Fidel revealedthat he never supported the initiative, “We commit-ted a big mistake by creating the MLCs, but we are aParty governed by democratic centralism and wehave to abide by it. The Party leadership approved it,although I had my own opinion, I respected that ofthe others (in “El campesinado” 1991).

ORIGINS OF THE MERCADO AGROPECUARIO

As it entered the most serious crisis in its history, eu-phemistically called the “Special Period in Time ofPeace” (SP), Cuba chose a hybrid strategy whichcombined elements of a Chinese-style opening to theworld market with the autarky model of North Ko-rea. While it would be difficult to speak about aneconomic blueprint during the Special Period, themain policies can be summarized as follows: austeritymeasures aimed at conserving energy and reducingimports of raw materials; increasing domestic foodproduction; attracting foreign investment; expandingmarkets for Cuba’s traditional and non-traditionalexports such as biotechnology; an emphasis on thedevelopment of tourism; and some limited manageri-al and structural reforms at the enterprise or ministe-rial level (Pérez-López 1995, p. 128). In any case anincreasing use of market-like features in the Cubaneconomy can be seen from the announcement of theSpecial Period in August 1990 to the present.

We can divide the SP into three approximate phases:the Dual Strategy Phase (August 1990 to mid-1993);the Domestic Reform Phase (mid-1993 to August1994); and the Mixed-Market Phase (September1994 to the present).14

14. Measures were introduced as necessary actions in order to address specific problems such as capital accumulation and investment(inversión extranjera and empresas mixtas), excess liquidity or budget deficits (saneamiento de finanzas internas), stimulate production(mercados or UBPCs) or create employment (auto-empleo). However, these measures have been encumbered by high levels of regulationand in the case of self-employment, high entry costs for individuals.


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The Dual Strategy Phase was a period of “mixed” ap-proaches. The formal economy consisted of a mar-ket-oriented external sector and a command-style do-mestic sector. By the end of 1990, a two-tieredeconomic policy was set where external policies wereincreasingly connected to the world market economyand domestic policies were based on austerity and au-tarkist measures.15 The external economy emphasizedthe cultivation of new trade partners, export diversifi-cation, tourism, and foreign investment (Mesa-Lago1994a). The domestic economy continued to becharacterized by Guevarist strategies such as the am-bitious Programa Alimentario [Food Program], thereturn of moral incentives and voluntary mass mobi-lizations.16 This situation created strong contradicto-ry effects, such as a boom in the black market and anincrease in crime (“Régimen,” 1992; Whitefield1991, 1992). The intention of this policy was to in-sert Cuba into the world market economy whilekeeping the world of the market out of Cuba’s do-mestic economy.

EL LLAMAMIENTOIn March 1990, the Central Committee of the Cu-ban Communist Party invited Cubans to participatein mass meetings to discuss important issues. The“llamamiento” [convocation] to the Fourth PartyCongress was made for the purpose of “deepeningthe process of rectification” and to “permit the per-fecting of society” starting with the Party itself. Thefirst round of meetings held in April was abruptlycanceled by the Party leadership who complainedabout the lack of sincerity and real debate.

The Party reconvened the meetings in the summerafter establishing the bounds of discussion: the one-

15. Ritter (1995) writes that Cuba has a “bifurcated economy” divided into a socialist and an internationalized spheres.

16. One of the centerpieces of the strategy to confront the Special Period was the Food Program. The program was started in 1990and had two major goals: to make the country self-sufficient in tubers, vegetables and other food products and to increase the produc-tion of export crops such as citrus and sugar. To achieve its aims, the program required massive mobilization of labor from the cities tothe countryside, the employment of vast resources to house, feed and clothe workers, the importation of irrigation equipment, trucks,machinery, seed, fertilizers, pesticides, and the building of a network of dams and irrigation fields (Mesa-Lago 1994a, p. 24).

party system, the socialist nature of the economy,and the leadership of Fidel Castro (Pérez-Stable1994, p.169). This time, citizens felt free to expressthemselves. One of the most popular changes re-quested was the return of the free peasant markets—the MLCs (Gómez 1992, p. 13; Pérez-Stable 1994,p. 169; later confirmed in deliberations at the PartyCongress in October 1991 in “El campesinado”1991; but not mentioned in discussion of “salientpoints” of the “Llamamiento” in Reed 1992, pp. 17-18).17

On the fourth day of the Congress, Manuel Alvarez,a delegate from Pinar del Río, brought up the MLCs.Granma obliquely reported, “he emphasized that hehad gathered some opinions that criticized the situa-tion that the markets had disappeared and that effec-tive measures had not been taken against the blackmarket, because people now don’t go to the market,but to the countryside where they pay higher prices”(“El campesinado” 1991).

The response against the MLCs was strong. Delegateafter delegate rejected the markets and underscoredthat the only solution to the problem of agriculturalproduction and distribution was the Programa Ali-mentario (Food Program). One delegate, a CPAmember, said he “felt ashamed to speak about theMLCs again. We can never go back to them becausethey didn’t resolve anything. They only accom-plished one thing: to make unscrupulous men rich.”Another delegate said, “To allow the MLC wouldnot only be a betrayal of the peasant, but to the peo-ple as a whole” (“El campesinado” 1991). Finally, Fi-del addressed the delegates and rejected the MLCs

17. The return of the MLCs was also one of the demands made by dissident groups. La Carta de los Diez, signed by members of thegroup Criterio Alternativo included it in its list of requested reforms.


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calling them an unsuitable idea borrowed fromabroad and a source of corruption.18

By mid-1992, it became obvious that the Food Pro-gram had been a failure. Many of the features de-signed to support the program such as the buildingof rural housing and new dams were canceled. Themain reason cited by the regime was the drastic de-cline in imports of fertilizer, pesticides and fuel (seePérez-López 1995, p. 131). Despite some modestgains in output in the period 1990-1992, e.g. tubers16%, there were declines in the production of beef,pork, poultry and milk. The sugar harvest also expe-rienced a drastic decrease: the 1992-1993 zafra yield-ed 4.2 million tons, while the year before it hadreached 7 million tons (Pérez-López 1995, p. 133).

The black market became an important alternative toa population whose monthly rations were inade-quate. “The black market rapidly expanded, becamedollarized, and was increasingly supplied by goodsstolen from the state sector and by foodstuffs illegallysold by private farmers” (Mesa-Lago 1994b, p. 25).Party and government officials continued to publiclyoppose any liberalization of the agricultural sector.The regime responded by cracking down on eco-nomic crimes in police actions with names like “Op-eration Bell-the-Cat” (Whitefield 1991, 1992). “Itisn’t moral or proper to pilfer from society what it isdue and later dedicate those resources to dealing inthe black market for profit,” reported the CubanPress Agency (in “Régimen” 1992).

The dual approach had not stopped the precipitousdecline of the economy and by mid-1993, the Cubanregime began to introduce market-oriented reformsinto sectors of the domestic economy (Bussey 1993;Mesa-Lago 1994b). The most important measureswere taken in the summer of 1993, which marks thebeginning of the Domestic Reform Phase, included

18. After the Congress, Party leaders continued to trumpet the Food Program. They also dismissed the MLC as an insignificant con-tributor of only 2-3% of produce to consumers. At the same time that they decried it because it had a negative effect on agriculturalproduction (see interview with Raúl Castellanos, member of the CC of the PCC in Gómez 1992).

the legalization of hard currency (known as dollariza-

tion), the approval of limited self-employment and

the creation of the UBPCs.19

The domestic reforms initiated in the summer of

1993 addressed some of the concerns, but it appears

that they may have exacerbated existing tensions and

were creating increasing inequality (ANEIC 1995a).

They also revealed the increasing strength of a re-

formist tendency within the government willing to

allow the play of market-oriented mechanisms in the

economy. The changes introduced came with exten-

sive restrictions and some observers noted that the re-

gime was trying to “regulate” the reforms “to death”

(Mesa-Lago 1994a).

The fidelista side, led by the maximum leader, sty-

mied fiscal and structural reforms promoted by Fi-

nance Minister José Luis Rodríguez and others in the

National Assembly of Popular Power in late 1993.

“Fidel Castro led the chorus against capitalism and

the ‘excesses’ of the profit motive and called for as-

semblies (parlamentos obreros) in workplaces and

neighborhoods to discuss the package. Raúl Castro

lambasted ‘reformist bureaucrats’ who did not have

the ‘real interests of the masses’ in mind (Pérez-Stable

1995, p. 15).”

In an apparent victory for hardliners, the “parlamen-

tos obreros” supported the Castros’ call for caution

with reforms in the Spring of 1994. At about the

same time, the regime launched Operation Girón 94,

a clampdown on illegal commerce of all kinds. This

was accompanied by measures that placed limitations

on the self-employment reforms of the year before,

19. Unidades Básicas de Producción Cooperativa (UBPCs) are production cooperatives formed from state farms in both the sugar andnon-sugar sectors, authorized in September 1993 by the Council of Ministers. Some Cuban economists refer to the UBPCs as “thethird agrarian reform” (e.g. lecture by Pedro Pablo Cuscó at the University of Miami, July 26, 1994 ). For different perspectives on theUBPCs, see Mesa-Lago (1994a.)


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the closing of paladares20 (which had actually startedin December 1993), a crackdown on jineteras andjineteros [prostitutes and hustlers], black market prof-iteers nicknamed macetas and a campaign against ille-gal enrichment [enriquecimiento ilícito] (ANEIC1995d; Alfonso 1994a; Mesa-Lago 1994b). In May1994, the National Assembly agreed to what ap-peared to be a compromise package of measures thataddressed the fiscal and budgetary problems of Cubawithout taking actions that could be called “capital-ist” or “neo-liberal.”21 The imminent opening of themarkets had been rumored since the July party meet-ings (see Alfonso 1994b, Whitefield 1994a).

The MLCs were not mentioned in the press, but the“crisis of agricultural production and distribution”became almost a code phrase for indirectly discussingthe issue. Part of the problem was that farmers wereeither cutting back on production or withholdingproduction from the acopio in order to sell on theblack market. ANAP president Osvaldo Lugo dis-cussed it in a July 11, interview in Trabajadores. Hesuggested opening agricultural markets which couldhelp in the areas of “distribution, regulation, andabove all, encouraging peasants to produce more(quoted in Malapanis & Walters 1995).”

Raúl Castro had begun to take greater role in manag-ing the crisis late in 1993. By the summer of 1994,his involvement became more important. He ledthree regional party conferences in July where he pro-claimed “to satisfy the food needs of the people wasthe number one objective” (“Satisfacer” 1994). Raúlalso delivered the speech at the 41st anniversary ofthe assault on the Moncada Barracks where he reiter-ated “today, the principal economic and political

20. Paladares are small- to medium-sized private restaurants usually run out of people’s homes. They are named after the name of arestaurant chain featured in a Brazilian soap opera broadcast in Cuba in the early 1990s (ANEIC 1995b). Current regulations limitthem to no more than 12 chairs.

21. The trade union newspaper Trabajadores said that some the proposed measures “looked neoliberal or capitalist” and urged caution,echoing Fidel and Raúl.

task, is the production of food, including sugar”(Castro, R. 1994).

Despite the straight-forward goal, contradictory mea-sures exacerbated the tension and confusion on theisland. As 1994 progressed, the crisis atmosphere in-tensified. Shortages, long and frequent electricityblackouts, and a deepening sense of hopelessness, es-pecially among the youth. The result was an increasein illegal emigration, defections abroad and in for-eign missions in Havana, an epidemic of street crimeand a general disdain for order. The informal or sec-ond economy grew to make up for the receding Cu-ban State. A Cuban economist is quoted as sayingduring this period, “there is no clear government eco-nomic policy. Everything is vague. You don’t knowexactly what is permitted” (Slevin 1994).

The regime was unable to head off the climax of thecrisis: the violent anti-government street demonstra-tions in Havana of August 5 (the Maleconazo22). Thedisturbance was quickly quelled, and the regime re-sorted to one of its traditional ‘safety valves’ for dis-content by allowing Cubans to leave on almost any-thing that would float.23 The Maleconazo proved tobe a turning point in the policy debate allowing themore pragmatic tendencies to come to the fore andreintroduce markets as a way to encourage produc-tion and to address other problems of the economy.

The Mixed-Market Phase emerged in September1994 in the wake of the events of the summer withthe announcement of the opening of the mercadoagropecuario which the Cuban people had openly re-quested during the 1990 llamamiento. Had the re-gime been planning to open the markets all along? Ifyes, the Maleconazo and the Balsero crisis delayed the

22. From Malecón, the name of the seawall along the Havana littoral. It is also the name of the street that follows its path. The distur-bances occurred along the Malecón and in the streets of Central Havana.

23. Approximately 37,145 Cubans left the island by sea in 1994. Over 32,000 left between August 1 and September 13, 1994, whenthe Cuban government began to enforce the migration agreement signed with the United States (Mesa-Lago 1995, p. 6). For more in-formation on who the balseros were, see Ackerman (1995).


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planned announcement of the markets (Mesa-Lago1995, p. 17). However, at least one knowledgeableParty activist resident on the island, claims that therewere no definite plans. She credits the August riotand government concern over popular discontent ex-pressed by the rapid departure of over 30,000 people(telephone interview, May 3, 1995). Bert Hoffmanalso notes this coincidence and points to the acceler-ating rhythm of change after August (Hoffman 1995,p. 99).

The National Association of Independent Econo-mists of Cuba (ANEIC) came to another conclusion.They opined that it was the potential impact of theClinton Administration’s restriction of remittancesfrom the United States that finally forced the regimehardliners to open the MAs, not primarily a fear of asocial explosion:

“Concientes de toda esta situación y percatados deque la medida tomada por el presidente de los EstadosUnidos, William Clinton parece definitiva, el Estadocomienza a buscar soluciones de emergencia que noestaban contempladas en la línea inicial de acción yaque van en contra de los principios fundamentalesque trataba de mantener. . . consideramos que el mer-cado agropecuario surge en última instancia comoconsecuencia de la afectación de la entrada de divisaque ha tenido el país . . . lo cual ratifica indiscutible-mente las posibilidades de quedarse sin las reservas ysin poder de importaciones (ANEIC 1995c, p. 14).”

Raúl Castro confirmed in September that the merca-do had been discussed at three regional party confer-ences held in July that he had chaired (Báez 1994, seealso Alfonso 1994b).24 A review of Raúl’s announce-ment of the opening of the MAs revealed that the de-bates over the summer were intense, but does not re-

24. The imminent opening of the markets had been rumored since the July party meetings (see Alfonso 1994b; Whitefield 1994a).

veal if a decision to reopen markets was taken at thesemeetings (Batista Valdés 1994).

After the Cuba-U.S. agreement stanched the rafterexodus, the balance of power shifted toward the re-formists who were now free to try a mixed-marketstrategy. The market-oriented measures of this stagewere to be accompanied by reforms of the tax system,a new foreign investment law, the restructuring ofstate entities (redimensionamiento) and the massivedismissal of over 500,000 state employees (racional-ización de plantilla), but these moves have been de-layed.

THE MERCADO AGROPECUARIO“Si hay comida para el pueblo no importan los ries-

gos” —Raúl Castro25

The AnnouncementThe opening of the Mercado agropecuario was an-nounced in an interview with Raúl Castro publishedin the Communist Party daily Granma on September17, 1994.26 In it he declared, “the country’s main po-litical, military and ideological problem today is tofeed itself . . . in order to alleviate the situation, [we]expect to open farmers markets soon” (Báez 1994, p.6). The news came at the end of a difficult summerand after long discussions within the party and gov-ernment regarding the crisis of agricultural produc-tion and distribution (see Alfonso 1994b; R. Castro1994; “Satisfacer ” 1994).

Within days, a special meeting was called to explainthe move to those who would be involved in its im-plementation and administration.27 According toRaúl, prices at the new markets would be set by sup-ply and demand, and their operations would be regu-lated and taxed by the government. He explainedthat if the measure was carried out systematically, it

25. “If there is food for the people, the risks don’t matter” (Raúl Castro in Báez 1994).

26. The Mercado Industrial y Artesanal (MIA) opened on December 1, 1994. Vendors at the MIAs can sell non-primary products tothe public at prices set by supply and demand (Rodríguez Fernández 1994). This was followed by the re-authorization of paladares anda small expansion in the list of permitted self-employment categories.

27. Among those reported in attendance were Politburo members, provincial government leaders, party cadres, administrators fromthe ministries of agriculture and of internal commerce, as well as leaders of the National Association of Small Farmers (ANAP) (Pagés1994a).


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would help stimulate production (Pagés 1994b).Other stated objectives of the new measure included:to combat the negative effects of the black market, toincrease the variety of products available to the pub-lic, to make the surpluses from self-consumptionplots available at the markets, to encourage the culti-vation of fallow land and to give consumers addition-al choices (Pagés 1994a).

On October 1, 1994, approximately 130 MercadosAgropecuarios opened throughout Cuba (Pagés1994d). Although leaders played down the immedi-ate impact of the markets, the crowds that greetedthem on the opening weekend were enthusiastic de-spite the high prices.28 The Cuban press was re-strained in its coverage: “We can’t expect the open-ing of the markets to become a magic fix” (Pagés1994e), but the foreign press was more effusive in itsreporting (see for example Vicent 1994, Whitefield1994b).

Producers could sell their surplus yields once theyfulfilled their monthly quota to the state procure-ment system (acopio). Prices were set by supply anddemand. The following products could not be sold atthe markets: potatoes, rice, beef, horse, mule or don-key meat, fresh milk, coffee, tobacco, cacao or theirderivatives. The Provincial Assemblies of PopularPower would administer the markets and be incharge of granting permits, doing inspections andcollecting rents and taxes.

The resolution regarding the operation of the mar-kets authorized 8 kinds of sellers: State farms and en-terprises, non-sugar producing UBPCs, CPAs, thefarms of the Youth Workers’ Army (EJT), the Creditand Services Cooperatives (CCS) representing theirindividual members, independent small farmers,state enterprises with plots for their self-consump-tion, individuals who produce in parcels for the self-

28. The Ministry of Internal Commerce estimated that there were $14.5 million pesos in sales and over $700,000 pesos in taxes col-lected in the first two days (Pagés 1994e).

consumption of their families, and people who pro-duce in their yards and in small plots (see “Decreto yresolución” 1994).

All of the entities may select “representatives” to selltheir products in the markets except those in the lasttwo categories.29 This is a major difference from theMLCs of the 1980s where producers could only sellwhat they grew on their own land (Rosenberg 1992b,p. 253).30 ANAP president Orlando Lugo noted, “alot of them [peasants] do not like to go to the mar-kets. We’re better off having the farmer producingon the farm instead of selling in the market (Borrego1994b).” The distinction between “representative”and “middleman” other than their legal status is notvery clear.

Under the original MLC legislation, farmers were tosell in their own municipalities and could not selloutside of it. The MLCs were was the difficulty oftransporting produce to the predominantly urbanmarkets (Rosenberg 1992a). The original MLC banwas intended to discourage the employment of driv-ers and middlemen and to keep producers from con-centrating in large cities, particularly Havana. Thisproblem was solved for the MAs with a decree liber-alizing the rules allowing the leasing of vehicles an-nounced on October 7, 1994. Once drivers complet-ed their required assignments, they were free to leasetheir trucks, tractors and other vehicles to agricultur-al producers. The fee was to be arrived at by mutualagreement of the contracting parties. The decree evenallowed military farms to lease their off-duty vehiclesfor this purpose (Vicent 1994).

On the first weekend the seller with the highest vol-ume of sales in Havana was the EJT, followed by theUBPCs and the CPAs (Pagés 1994e). By November17, Granma reported $187 million pesos in salessince their opening. The MAs were averaging $4.7

29. All others are apparently limited to one representative per entity (Lee 1995d).

30. This did not stop the emergence of “intermediaries”- middlemen who sold produce at the MLCs. The controversy over “interme-diaries” becoming rich by selling products they did not produce was a major point of attack for Fidel Castro when he banned MLCs in1986.


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million pesos per day by early November. The articlealso asserted that 70% of the sellers were small farm-ers, although they made up only 30-35% of produceon sale (Calzadilla 1994).31 At year’s end the MAshad brought in more than $468 million pesos insales, $47 million pesos in taxes and had the partici-pation of an average of 4,000 vendors nationally. Ag-riculture Vice Minister Miguel Angel Casa praisedthe MAs and reported that producers had increasedtheir plantings due to the incentive of the market.The ANAP president announced that because oftheir earnings in the MA, 180 CPAs would retiretheir debts with the National Bank by 1996 (de laRosa 1995).

There were reports that CCS, private farmers andparceleros were reluctant to participate because oftheir past experience with the MLCs and more recentexperiences with the campaigns against macetas andillegal enrichment. ANAP president Lugo was inter-viewed by Radio Rebelde on October 1, 1994 as hevisited small farmers in order to encourage their in-volvement.

The most extensive review of the performance of theMAs in the Cuban press was a three-part series pub-lished in Granma in late March (see Lee 1995b,1995c, 1995d). The articles reprised the most com-mon consumer complaints: high prices and the starkcontrast between mostly empty state-run placitas andbustling agromercados.32 People do complain, but thewriter says that if consumers were asked if the MAsshould be eliminated, their answer would be a defi-nite ‘no.’

As of late March 1995, there were 211 MAs in Cuba,29 of them in Havana. Approximately 19% of all ag-ricultural products were sold through MAs. Havana’smarkets account for 56% of sales income, 32% ofproducts sold. The MAs are still accessible to a limit-ed portion of the population that can afford its pric-es. An increase in the participation of the state farms,

31. An economist living in Cuba said in a conversation that in Havana, location of the largest and most lucrative markets, the statesector made up 70%, while the private agricultural sector made up 30% (11/14/94).

32. Susana Lee synthesizes the complaint as follows: “Pero... las placitas están vacías y los mercados llenos en cantidad y variedad” (Lee1995b).

the EJT and the UBPCs in the MA are among themeasures being studied in the hopes that their greaterinvolvement will act as a price regulator (Lee 1995c,1995d).

By Spring 1995, the cost of many products at theMAs had reportedly declined. The price of porkdropped between 25%-50% from October and otherreductions were reported in the price of tubers, vege-tables and grains. At the same time, a decrease insales volume was also reported indicating a reductionof spending power, i.e. a decline of 19,000 quintalsfor the first week in April, compared to the first weekin March. Another explanation for the decline inprice and in sales was the improvement in the qualityand quantity of goods for sale at cheaper state-runplacitas. Juventud Rebelde reported that some sellers,mostly small peasants, were so concerned about thedropping prices that they were trying to band togeth-er to fix a floor price for their products (González, A.1995).

THE MERCADOS COMPARED

The MLCs and the MAs shared many similaritiessuch as the requirement that producers prove the ful-fillment of their acopio quota, and the ban on sales ofexport cash crops and beef. The law authorizing theMA addressed many of the limitations of Decree66—the MLC law. For example, the list of eligiblesellers was increased so that virtually anyone whoproduces an agricultural product may participate ifthey meet the requirements and get the permission ofthe local authorities. Producers may also employ“representatives,” hire transportation and sell in anymunicipality that authorizes them (see “Decreto”1994; Rosenberg 1992b).

The most important policy change is who can sell?The MLC permitted sales by private and state sectorproducers. Participation by the state sector was dis-couraged and later banned after Operation Bird-on-a-wire. So far, the MAs have seen an opposite trend;


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the state sector is being encouraged to increase its in-volvement in the market as a way to self-finance theoperation of enterprises (Bordón & Roque 1995; Lee1995c) and to help regulate prices (Lee 1995d). Themilitary is also very involved through its farms, theEJT, and military-administered enterprises. This isnot surprising in light of the increasing militarizationof the Cuban economy including agriculture (Lee1995b). The Ministry of Interior’s farm systemwhich uses prison labor to grow crops for the minis-try’s commisaries, may soon be selling their surpluson the MAs as well.

The private sector was reluctant at first to participatein the MA (ANEIC 1995b) no doubt because of ear-lier experiences with the regime’s drastic policyswings. There was also an underlying fear that manysellers and producers had about being labeled macetasand losing everything in light of the very public anti-illegal enrichment campaign in the Spring of 1994(Bordón & Roque 1995, p.5). Their fears appear tohave subsided because of the large presence of thestate sector especially the EJT.

The private farmers found that the state sectorsoaked up a substantial portion of the excess liquidityof pesos in the first six months. Their large presencein some markets gives the state sector price-settingpowers. Reports indicated that the State and para-State vendors constituted between 10-35 % of sellers,but accounted for approximately 70% of sales. How-ever, a recent CEPAL report noted that 70% of sell-ers were peasants. This discrepancy reflects differingdefinitions of peasant. The CPAs, the UBPCs andthe other entities have lower costs and can spread anylosses among members. Individual private farmersmay not have that option.

Consumers complained bitterly about high prices atthe MLCs. Popular demands for price controls weredismissed by Fidel as interference in the market. TheMLC reforms of 1983 actually made matters worse.Reducing the number of sellers and not regulatingprices virtually guaranteed that prices remained highuntil the end (Rosenberg 1992a). There have alsobeen complaints about the prices at the MAs butconsumers seem reticent about complaining (Lee

1995b, 1995d), especially after what happened to theMLC.

The proportion of consumers who have regular ac-cess to the MAs is limited to between 10%-20% be-cause of prices (Bordón 1995, p. 2; Bordón & Roque1995, p. 6). The State showed concern about thecontrast between abundant MAs and empty shelvesat State libreta stores. This encouraged the regime toredirect potatoes, cabbage and other greens to theplacitas (González, A. 1995). An increase in the avail-ability of some foodstuffs at state stores and the large-scale involvement of the state sector has also helpedbring down prices in the MAs. Lower prices mighthelp placate low-income consumers who Fidelclaimed to speak for when he banned the MLCs in1986.

IDEOLOGICAL CONTRAPUNTEO

Elite support or rejection of the MLCs was describedabove. Rosenberg quotes José Luis Llovio-Menéndezabout a secret report circulated among party andministry elites in 1980 that in effect, sabotaged theMLCs just after they opened. This would explain thesparse support the MLCs received from the nomen-klatura. Political elites have also been reluctant toshow support for the MAs. Perhaps it is still to earlyto tell but some determinations about the actual po-litical and institutional supporters of the MAs is pos-sible.

ANAP president Lugo and Finance Minister Ro-dríguez appear to have encouraged Raúl to discussmarket approaches to solving the problem of agricul-tural production and distribution, as well as the fiscaland monetary problems Cuba faced in 1994 at theJuly party conferences. Raúl also announced theopening of the MAs and appeared as the front manfor the market option (Báez 1994; Borrego 1994b).It would have been unseemly for Fidel to announcesuch a drastic turnaround, especially after his vituper-ative attacks on the MLCs at the Fourth Party Con-gress. This is not to say that the MAs returned be-cause of the victory of a raulista faction. There is noevidence for the existence of such a faction. Raúl’s in-volvement was both tactical and cosmetic.


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The main institutional supporters of the MAs appearto be the National Association of Small Farmers(ANAP), the Agriculture Ministry (MINAG), the Fi-nance and Prices Ministry, the Interior CommerceMinistry, the Provincial Popular Power govern-ments, and possibly the military. Other supportersinclude farmers and medium-higher income con-sumers. Opponents of the MAs have accepted theiroperation if only as a transitory measure to deal withthe food and financial problems facing Cuba. Theyprobably include Fidel and some of his closest ideo-logical colleagues such as José Machado Ventura, Ar-mando Hart, Ricardo Alarcón, as well as party andgovernment functionaries involved in the acopio andthe central resource distribution system who losepower and prestige as the markets begin to function.

The array of detractors, now muted by current neces-sities, does not bode well for the MAs if the foodproblem is alleviated enough for the regime to feelmore secure about the population’s nutrition andquiescence. The fate of the MAs, like the fate of theMLCs, depends on the political arrangements offriends and foes that can develop around them.

CONCLUSION: POLITICS AND MARKETSThe story of the rise and fall of the MLCs and theemergence of the MAs, are emblematic of the strug-gle between two different approaches to socialist eco-nomics. The opening of the MAs are evidence of thefailure of Cuba’s socialist experiments and of its lead-ership. The MA also represents the legalization (andto some extent the manipulation by the state) of theCuba’s functioning market economy, the black mar-ket.33

The contrapunteo between ideology and pragmatismintensified as the economic crisis of the SP worsened.In an important sense, the MAs are part of a struggle

33. “If the state experiences difficulties in meeting foreign debt obligations or import requirements, it is likely to turn to the black mar-ket to tap its resources” (Los 1990, p. 217).

for policy dominance of three different approachesamong Cuban political and economic elites: one fi-delista and ideological and two more pragmatic ten-dencies. By mid-1993, these distinct tendencies werediscernable: a hardline fidelista group led by FidelCastro wedded to Guevarist moral economic policiesand opposed the use of market mechanisms; a Con-junctural-Pragmatic tendency that favored limitedreforms and the strategic use of markets in a centrallyplanned economy, a “mercado en la economía;” and aStructural-Reformist option which supported majorstructural changes that would lead to a form of mar-ket-socialism, an “economía con mercado.”

It is not the intention of any of these tendencies to“propel” Cuba to market capitalism, but to “save”the Revolution and its accomplishments. In the Cu-ban case, reform refers to changes within the system(conjunctural) or to a model of reform-communism(structural) not to a Velvet Revolution.

Like the MLC, the Mercado Agropecuario is the resultof a compromise between Fidelista orthodoxy and re-form. However, this time, the reformists were in astronger position to project their policy options.

The fidelista group is led, not surprisingly, by FidelCastro himself. They justify the changes by blamingexternal forces for Cuba’s predicament (e.g. collapseof the Soviet Union, the embargo, weather). Theyhighlight the moral dangers and human costs of re-forms in terms of increased inequality, privilege, cor-ruption, and foreign influences.34

The group has been resistant to the changes by slow-ing their implementation, imposing restrictions, ap-pealing to the egalitarian values of the Revolution,and relying on “el genio colectivo del pueblo [the col-lective genius of the people].” Fidel and other leaders

34. Granma, perhaps tongue-in-cheek, referred to the danger of the “black market of ideas” in an article criticizing the plot of a popu-lar television soap opera from Japan called Oshin, “the formerly battleworthy peasant leader Kota confesses his desmerengamiento onscreen, and says that it has not been worthwhile to struggle for the unreachable goals of yesterday. The prudent thing to do is to dedi-cate himself to business and free competition... the Japanese maceta is in drag disguised as an honorable businessman!” (Pita Astudillo1994). Desmerengamiento literally means the collapse of a baked merengue; the collapse of something frothy and full of hot air; like apack of cards.


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recognize that the MA and other market features are“capitalist elements” but insist that only an “idiot”would say that Cuba is moving toward capitalism.35

Fidel and others often give the impression that thereforms are transitory measures and can be reversedwhenever the extraordinary conditions are overcome.This viewpoint is held by Fidel, members of the his-toric leadership, and other Communist Party func-tionaries.

The other two groups represent the pragmatic side ofthe dichotomy. They differ mostly as to pacing andin their final objective. One group is defined by apragmatic conjunctural approach that favors limitedreforms and the strategic use of markets in a centrallyplanned economy controlled by a “capable State”(Alonso, A. 1993, p. 88), a “mercado en la economía[a market in the economy].” The conjuncturalistsprefer a slow and calibrated economic opening withas little political impact as possible. They present re-form as a technocratic exercise consonant with social-ism.

The Chinese and Vietnamese models appeal to thisgroup because they allow for an economic openingtoward the outside while the political regime can re-main unchanged. This group received a boost whenon a visit to Paris in 1994, Fidel quipped that Cubawas interested in the Chinese model. The intensifica-tion of the Cuba-Vietnam relationship is also evi-dence that this is an option being studied closely.Nevertheless, some the reforms announced by Lageand Rodriguez in late 1993 were panned as “neo-cap-italist” or “neo-liberal” by Fidel, Raúl and otherhardliners. The measures were either postponed oraltered to reflect orthodox concerns. Their proposalsdo bear some resemblance to IMF structural adjust-ment plans and show the influence of the SolchagaReport (“El informe secreto” 1992). They also en-couraged the study of China and Vietnam and theiramalgam of Asian despotism and enclave capitalism.

The other reformist tendency can be called “structur-alist” in that it recognizes the need for systemic

35. Fidel prefers to interpret the MA in terms of production not marketization: “Nosotros hemos establecido que un 20% de la pro-ducción se lleve libremente al mercado---” (“Entrevista” 1995).

change without neccesarily giving up on socialism.Proponents are the policy makers who represent acompromise between stagnation and reform. Theirpoint-of-view is shared by individuals that comefrom academic, finance or non-party backgrounds.They possibly have support among those who have astake in the new market arrangements (e.g. ANAPPresident Lugo, other producers) or in the emergingState capitalist sector of mixed-enterprises, many ofwhom are former military, former party cadre hacksor the scions of nomenklatura families. They assertthat reforms were justified for the main purpose ofgenerating the economic resources to maintain “in-dependence, social justice, and human solidarity”(Lage 1994). In their view, the solution is the promo-tion of growth and production, (Rodríguez Derivet1995) with the State intervening where needed. Likethe other pragmatic tendency, they claimed that thereforms are “inevitable” or “irreversible” (Alonso, A.1993; see also interview with José Luis Rodríguez byRodríguez Derivet 1995).

The Structural-Reformist option supports structuralchanges that would lead to a form of market social-ism, an “economía con mercado [an economy withmarkets].” They see the MAs as part of overall decen-tralization of decision making on production anddistribution of foodstuffs. They believe markets canbe regulated but while positive aspects of marketsshould be encouraged (see Carranza interview inGonzález, L. 1995). Pedro Monreal writes, “econom-ic reform implies fundamental change in Cuba’s so-cial and political structures” (1993, p. 10). Julio Car-ranza of the Center for the Study of America (CEA),an apparent structuralist, says that “socialism is, inthe best of cases, the last of mercantile societies andas such, the place of markets in it must be recog-nized” (1992). They also acknowledge that “econom-ic reform [is] a political process (Monreal 1993, p.11),” and not just a technocratic exercise.

This tendency finds support mainly among academ-ics, particularly younger economists. Some of their


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views were expressed at the recent 4th Congress ofthe National Association of Cuban Economists(ANEC). Some ANEC economists called for “urgentstructural changes” especially the decentralization ofbusiness management and the restructuring of stateenterprises. National Institute of Economic Researchdirector Arturo Guzmán said, “the reform and reor-ganization process within the state enterprise must al-low for the creation of an autonomous public tradingbusiness” (Costa 1995). Some economists urged thatcooperatives and small private businesses be allowedto expand in order to cope with the coming crisis ofmass unemployment (Costa 1995).

The truth is that there is little distance between theconjuncturalists and the structuralists. They bothagree on a strategy: “to pursue long-term goals ofeconomic reform under state control” (Monreal1993, p. 11). They agree on the role of a strong stateand on the importance of sustaining the Revolution’s“achievements.” Their differences are more on a the-oretical level.

The intellectual and policy debate is narrow. It is be-ing carried out within very restricted parameters (seefor example Carranza, Monreal & Gutiérrez 1995).The basic limits have not changed: the Party, Social-ism and Fidel. If the leadership perceives a challengeor the potential for one, conjuncturalists and struc-turalists can end up outside the circle of influence,economic policy dissidents like the members of theNational Association of Independent Economists ofCuba (ANEIC).

The three tendencies presented here are by no meansCuba’s only options; they are just the ones that origi-nate from within the regime itself. There are otherkinds of models and approaches represented by thedemocratic opposition on the island: a vague social-ism “with a human face,” Christian-inspired SocialEconomy, New Institutionalism, Neo-Liberalism,free-market capitalism and many others.

The reforms, the Mercados in particular, are timidand are obtained “a regañadientes” [grudgingly] fromthe top leadership. One of the effects of the compro-mised reforms has been that corruption and othereconomic crimes have increased, partly as strategies

to get around the restrictions. This reality hasbrought the expected moral outcry from Fidel andother hardline leaders seen in the last few months.The regulations and restrictions imposed on the mar-ket-oriented reforms such as the MAs and self-em-ployment, are dampening the potential positive ef-fects of the changes.

ANEIC economist Orlando Bordón makes a con-vincing argument that the reforms are actually juststrategies to resolve conjunctural problems intendedto maintain and preserve the model. He challengesthe notion that the changes being made are reformsmuch less evidence of an opening. He writes, “per-haps we are in the presence of conjunctural capitalistpatches that can be removed when the present crisishas been overcome” (Bordón 1995, p. 3).”

There is a sense that there is a race against time goingon. The reformers may not get the opportunity tomake the structural changes they desire unless some-thing changes at the top. The orthodox position ap-pears untenable in today’s world, but there is no scar-city of models that combine the economic efficiencyof the market with authoritarian political regimes.Markets do not automatically translate into libertyand democracy. Markets are not the same as capital-ism, and while a market economy seems a prerequi-site for democracy, a democratic system is not re-quired for the operation of a market system.However optimal we may consider the combinationof democracy and free markets, the Asian “models”are more attractive not only to the old fidelistas, butto the new state-capitalist entrepreneur of Cuba, theformer party hack or military official who has foundthe pallid reforms personally rewarding. This may bethe essence of an emerging Cuban model. It does notaugur well in the short-run for democracy.

However, we should not discount the unintendedconsequences of the reforms either. The truth is thatthe “conjunctural capitalist patches” Bordón writesabout appear to have taken a stronger hold than be-fore; 1995 is not 1985. Marta Beatriz Roque writesthat the seeds of a true market system are germinat-ing in the MA, even among people who work forState enterprises.


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These “seeds” are also sprouting as weeds in differentsectors of the economy in the form of corruption,egoism, and misanthropy. The rampant abuses seenin the market enclaves in the Cuban economy (andin peripheral “market” activities such as prostitution,drug trafficking and the fencing of stolen goods) arealso part of this sprouting.

The timid reforms may be intended to sustain basicneeds and keep Fidel and the party in power, butthey could lead elsewhere, maybe even to a real mar-ket and a real political opening. If this is where theyend up, it will not be because of conjuncturalists orstructuralists but because people are finding that theycan “resolver” for themselves.


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APPENDIX

Table 1Summary Characterization of Economic Periods

Predominant Approaches

Period Fidelista Mixed/Unclear Reformist

(1) Elimination of Capitalist System1959-1960 •

(2) Attempt to Introduce Orthodox /Stalinist Model 1961-1963 •

(3) Debate over Models1964-1966 •

(4) Sino-Guevarist Period1966-1970 •

(5) Soviet Reform Model 1971-1986 •

Phases (a) Redefinition 1971-1974 ✔

(b) Institutionalization 1975-1984 ✔ ➜ ✔ (MLCs)

(c) Re-centralization 1984-1986 ✔

(6) Rectification Process1986-1990 •

(7) Special Period 1991-1995 • Phases (a) Dual Strategy

1991-1993 ✔

(b) Domestic Reform1993-1994 ✔ ➜ ✔

(c) Mixed Strategy1994-1995 ✔ (MAs)

Legend: • - period ✔ - phase ➜ - trend

Sources: Based in part on Mesa-Lago 1994b, Rodríguez 1990.


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